My experience with Restaurant.com

If you're unfamiliar with Restaurant.com, it's a site dedicated to helping you save money when you eat out (their slogan: "Eat. Drink. Save. Money"). They do this primarily by helping you locate restaurants (by city, state, or zip) that offer discounted gift certificates.

A popular option is the $25 gift certificate that costs only $10. The certificates are added to your Restaurant.com account and then are available to be printed. Sounds like a no-brainer - if it weren't for the fine print.

These certificates have conditions, such as a requirement to spend X dollars over the amount of the certificate, a gratuity that's calculated on the full price (i.e. the certificate value plus the out-of-pocket), and, of course, certain menu items are excluded. So maybe not a guaranteed good deal, right?

But what if you could get that $10 gift certificate for $1? That was the case a few weeks ago (if you follow us on Facebook or Twitter, you would have seen us spread the word). For a limited time (if you used a certain promo code), you could get a $25 certificate for only $1.

Being the bargain hunter I am, I loaded up: spent $11 for 11 gift certificates (eight to restaurants we frequent during basketball season and three we go to on special occasions). But given the aforementioned conditions, was this really a good deal? This past Saturday, we found out.

My wife and I, along with our two little ones, joined one of my brothers and his family (I told them about the deal, so they had the same certificate) at a family-oriented sports restaurant called Beef 'O' Bradys. The certificate was for $25 off - but to meet the conditions for use, we had to spend $35, plus a required 18% gratuity would be added to the full amount.

So my goal was to spend right at $35 (not including the tip). The kids' meals were only $4 each. My wife and each ordered something was about $8 each. Hmm. Even after adding in (over-priced) soda and tea, we were still going to be short by 8 bucks. So we got an appetizer to share around the table to meet the $35 mark.

When the bill came, it was $36.14 with tax (but not including gratuity). Pretty close. At the time, I wasn't sure if tax would be allowed to be included (if not, we would have had to buy something else), but the fine print also gives the restaurant owner/manager some discretion. My fingers were crossed and, voilà, discount accepted, giving us an on-site obligation of $15.95.

So how much did we "save"? Interestingly, if we had ordered like we normally would have, we would have spent about $35 (two adults, two kids, two drinks, no appetizer, tax and tip). Instead, we spent $16.95 (the on-site bill + $1 for the gift certificate). So we spent $18 less and got an appetizer to boot. All and all it worked out well (my brother had a similar experience in savings).

But suppose we had purchased the Restaurant.com gift certificate at the regular $10 price? Would that be a good deal? In that situation, we would have spent $25.95 ($15.95 on-site + $10 for the gift certificate). So we would have spent about $9 less than normal. Not bad, but nothing to write home (or blog) about.

So it worked out quite well for us in this situation (we could have saved even more money if I thought to link our purchase through a rewards program such as Upromise.com or Ebates.com). Sure, it would have been cheaper just to eat at home, but there are going to be times when we eat out, so we might as well save some money when we do.

If you use Restaurant.com, keep in mind that (1) each restaurant may different requirements; (2) you'll likely pay a set gratuity no matter the level of service received (our service was lacking); and 3) you may have to order something you wouldn't normally to meet the dollar-amount requirement.

On the flip side, if you can score a 90% discount on an already 60%-off gift certificate, you'll leave the restaurant with more money in your pocket and perhaps a bag of leftovers too.

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Matthew Pryor in his 8th year with Sound Mind Investing, now serving as Director of Operations. Visit www.soundmindinvesting.com to learn more.